61% of Office Landlords Struggling to Find Tenants
Office landlords are having a hard time due to the pandemic.
More than three-fifths of the UK’s commercial landlords are struggling to attract tenants to traditional offices as businesses’ workspace demands have changed rapidly during the pandemic, new research by infinitSpace has revealed. The European flexible workspace provider has commissioned an independent survey among 204 UK commercial landlords, all of whom own one or more office buildings in the UK. It found that 62% are currently struggling to attract prospective tenants to fill their traditional office spaces. Almost two thirds (64%) reported having seen a “notable shift” in tenants’ demands during the pandemic, including terms and use of space. As a result, seven in ten (71%) office landlords plan to increase their flexible workspace offering in the coming five years.
infinitSpace’s research found that UK commercial landlords currently dedicate an average of 33% of their office portfolio to some form of flexible or co-working spaces. By 2026, this is forecast to rise 11% to 44%. Since the start of 2020, 59% of office landlords have begun offering shorter and more flexible leases. Over half (52%) added new facilities to allow tenants to collaborate when inside the building, such as meeting rooms or breakout areas, while 63% have added facilities to improve the wellbeing of tenants, such as a gym or relaxation space.
However, the office rental business has not recovered from the consequences caused by the pandemic, with the majority of private-sector employees working remotely, or in a hybrid model. In addition, the appearance of the omicron variant has set off alarms for those who were preparing to return to the offices, preferring to stay at home and work from there until the situation is under control.
Wybo Wijnbergen, CEO of infinitSpace, said: “What businesses want and need from their office has been steadily evolving over the past decade, but the pandemic has kicked the pace of change into overdrive. Our research shows that, as hybrid working becomes commonplace and businesses look for more collaborative and engaging workspaces, many landlords are struggling to attract tenants if they don’t have flexible offerings. “
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